Thursday, April 10, 2008

World's Cheapest Wind Energy Play?

From Bloomberg:

Sodium-Sulfur Battery Powers NGK's Unique Wind Energy

A village near the northern tip of Japan's main island is the proving ground for a 5-meter-high (16- foot) bank of batteries built by NGK Insulators Ltd., the Japanese industrial-ceramics maker that may be the world's cheapest wind-energy play.

Nagoya-based NGK's sodium-sulfur units, costing a reported 294 million yen ($2.9 million) per megawatt, store electricity for sale when demand is greatest and have 4.3 times the capacity of lead-acid devices. They may permit Japan Wind Development Co. to triple to 27 yen per kilowatt-hour what it charges at peak times for power from the turbines in Rokkasho, while the profit surges sixfold to as much as 13 yen, said Nobuyoshi Sato, an analyst at Ichiyoshi Securities Co. in Tokyo.

Batteries may make up 10 percent of NGK's sales in two years, versus 4 percent in the fiscal year ended last month, said Keith Olson at Bowen Capital Management in Hong Kong. NGK, trading in Tokyo at 16 times this year's projected earnings, is about 43 percent cheaper than Vestas Wind Systems A/S of Randers, Denmark, the world's biggest wind-turbine maker....

...Bowen Capital's Green Dragon Fund, co-managed by Olson, returned 44 percent last year. He says NGK shares are worth about 3,500 yen, based on a discounted cash-flow model that values the stock at 20 times estimated earnings in 2013....MUCH MORE